After last week’s WTO ruling regarding China’s importation of copyrighted materials, China has announced that it will appeal the decision. What are the implications of the appeal?
Reasons For China’s Appeal
China has given two related responses to the WTO ruling. First, China contends that the importation of copyrighted materials, including music, books, and movies is “completely unimpeded.”
Second, China explains that its policies regarding creative products are appropriate because “Chinese cultural products have a big deficit in global trade, and their competitiveness is low. So we took measures that fit the Chinese economy and historical cultural tradition.”
Implications Of China’s Appeal
China’s appeal has several implications.
1. China will integrate itself into the WTO on its own terms.
China will continue to argue that it adheres to international trade standards, even while other countries such as the United States will continue to protest China’s trade policies. At the same time, China will not simply accept that the same rules should apply so long as it is attempting to “catch up” to other countries.
The statement concerning Chinese economy and historical cultural tradition leaves no doubt that China feels that it needs more time to compete in the cultural realm. It so happens that the cultural realm includes copyrighted materials.
2. Political considerations matter.
One reason why the Chinese government wants to control the importation of films is the Communist Party’s desire to exert its control over the cultural realm. While China is making progress toward a freer, less regulated economy, like many other countries the government has its own interest in maintaining a degree of control.
Moreover, the Chinese government wants to ensure that its cultural products industries have time to develop and compete globally. That is an understandable position from an economic and political perspective.
3. Other countries will continue to pressure China on its anti-piracy enforcement.
The United States and other countries contend that China’s policies increase the demand for pirated goods. China has made some notable anti-piracy efforts. In 2006, China undertook an intense three month anti-piracy campaign that seized 58 million pirated DVDs and CDs. Defending its anti-piracy enforcement, China says it seized 76 million pirated goods and closed over 13,000 illegal counterfeiting operations in 2007. Also in 2007, the director of the United States Patent and Trademark Office pressed the Chinese government to lower the threshold for prosecution over pirated goods.
Until more countries and companies believe that legitimate goods can compete with pirated goods, they will continue to pressure the Chinese government to be viligant in its anti-piracy activities.
Douglas Y. Park
Twitter: @DougYPark